Eastland Group announces record-breaking year
24 July 2018
Gisborne-based Eastland Group is responsible for the reliable operation of vital regional infrastructure, including Eastland Port, Gisborne Airport and Eastland Network.
Eastland Group announced today that the year to 31 March 2018 was the most successful in its history. Income was a record $84.7 million with an audited profit of $17.6 million, up from $14.8 million in 2017.
The strong performance resulted in Eastland Group returning a record $10.1 million to sole shareholder Eastland Community Trust (up from a previous record of $9.9 million last year). This was made up of a dividend distribution of $8 million and interest paid on shareholder capital notes of $2.1 million.
Long term returns for the benefit of the community
“In 2003 Eastland Group had one asset, Eastland Network. That year we paid $250,000 to ECT - not the sort of numbers that can make much of a difference,” says Eastland Group chief executive Matt Todd.
“When Eastland Port was bought by our shareholder and joined Eastland Network as part of Eastland Group, we had $80 million in assets. In 2018, our long term strategy of asset expansion and diversification means our assets are worth $547.3 million. These are assets that are working hard and generating cashflows that will be used for the benefit of Gisborne and the wider Tairāwhiti region.
“In total, we’ve provided cash distributions of more than $100 million to ECT over the past 15 years. These are financial returns that can make a positive, genuinely transformative difference to the community that ultimately owns us.”
Maintaining critical regional infrastructure
Eastland Port is the most efficient, and second largest, log export port in New Zealand, and they also broke records this year. The port shifted three million tonnes of cargo in the 12 months to 31 March 2018, exceeding all forecasts. This was a particularly notable achievement given the constraints on ship berths and storage space.
Gisborne Airport saw continued growth, with passenger movements totaling nearly 171,000, up from 156,000 the year before.
Eastland Network is the electricity lines company for Gisborne, Wairoa and the East Coast. They had a solid year, delivering a slight increase in volumes and earnings. Despite the challenges caused by several damaging storms, they achieved full compliance with price-quality regulations. Their long term solar trial continues, as they explore the opportunities offered by emerging technologies and prepare to future proof the region’s power supply.
Preparing for the future
With rapid changes happening in the energy sector, and customer demand requiring expanded capacity at the port and airport, Eastland Group have spent the past year making sure all their businesses are robust and fit for purpose – and ready to deliver for
customers and the region for many decades to come.
In two significant initiatives for the business and the region, Eastland Group established a network of electric vehicle charging stations and opened New Zealand’s first community-focused energy hub, Electric Village.
Construction of the new Te Ahi O Maui geothermal plant near Kawerau progressed well during the year and is now nearing completion. This is the first geothermal power plant built under new health and safety legislation, and over 250,000 man hours were worked on site without a single lost time injury.
Once testing and consenting is complete and the plant is operational, it will generate around 25MW of clean, green energy and deliver strong returns for decades to come to the people of Tairāwhiti.
New board members
After eight years as chairman, Nelson Cull stepped down at the August 2017 AGM.
“On behalf of all the staff, we thank Nelson for his enormous contribution to the direction and growth of Eastland Group,” says Mr Todd. “I’d also like to acknowledge director Tony Gray, who stepped in as interim chair.”
Late last year, Keith Sutton and Fiona Mules were appointed to the board, with Mr Sutton becoming chairman in February 2018.
Over $200 million in local investment planned
In 2018, Eastland Group’s capital investment in Tairāwhiti was $30.8 million.
Over the next five years, Eastland Group is aiming to invest over $200 million in local infrastructure. These investments are necessary both to maintain existing assets as well as providing new capability that will enable the regional economy to continue to grow.
Planned expenditure includes maintaining and upgrading the electricity network, and unlocking the potential at Eastland Port so it can handle a predicted five million tonnes of wood a year.
“With Te Ahi O Maui coming on stream, Eastland Network delivering reliable power to the region, and Eastland Group’s increased shareholding in innovative Flick Electric Co., our involvement with the energy sector encompasses generation, transmission, distribution and retail,” says Mr Todd.
“This sector is undergoing seismic changes. Eastland Group is exploring new business opportunities and looking after our region’s interests.
“We also look forward to beginning the long awaited Gisborne Airport terminal redevelopment. This will offer an iconic welcome to Tairāwhiti, and the chance to share our region’s unique stories.”